CHAPTER TWO

AN OVERVIEW OF
MANAGEMENT THEORIES
Introduction
Management as a practice is as old as human
civilization, how ever, as an organized body
knowledge(theory) it is a recent phenomena.
The practice of management can be dated
back to thousands of years ago.
It was started with beginning of civilizations
and division of people into tribes.
 MANAGEMENT PRACTICE IN EARLY
HUMAN CAREER/ANCIENT CIVILIZATION
The Egyptian civilization was known for
planning, organizing, and controlling during
the construction of pyramids.
Early Greeks were known for their
management concepts such as specialization.
The ancient Rome used to emphasis on
personnel, selection and placement.
The existence of strong military forces in
early human activities.
But management as a systematic body of
knowledge and distinct discipline is the
product of 20th C
PROPONENTS OF CLASSICAL
&NEOCLASSICAL THEORY OF
MANAGEMENT
 SCHOOLS OF
MANAGEMENT
THEORIES
1.Classical Management Theory
Scientific management theory( F. Taylor)
Classical organization theory (H. Fayol)
Bureaucratic theory (M. Weber)

2.Neo Classical Theory

Behavioral or Human Relation movement theory
(E. Mayo & Hawthorne study)

3.Modern Approaches
System approach
Contingency Approach
Management Science
 CLASSICAL
MANAGEMENT
THEORY
The classical school is the oldest formal school of
management thought.
Its roots pre-date the twentieth century.
It is a theory that focused on finding the 'one best
way' to operate (perform) and manage tasks.
It was found during the period when Efficiency and
productivity became a critical concern of the Managers
at the turn of the 20th century.
The classical school of thought generally concerns ways
to manage work and organizations more efficiently.
Based on the management belief that people were rational, economic
creatures choose a course of action that provide the greatest economic
gain
SCIENTIFIC MANAGEMENT
THEORY (F.W. TAYLOR)

In the late 19th century,

management decisions
were often arbitrary and
workers often worked at an
intentionally slow pace
It was introduced in an
attempt to create a mental
revolution in the workplace
Thus, scientific
management was defined
as the systematic study of
work methods in order to
improve efficiency
 CONTRIBUTION OF SCIENTIFIC
MANAGEMENT THEORY TO
INDUSTRIES
F. W. Taylor (1856-1915) is rightly treated as the father
of scientific management.
He suggested the principles of scientific management.
F. W. Taylor’s Contribution to the Development of
Management Thought / Science
1. Emphasis on rational thinking:- He suggested
rational thinking on the part of management for
raising efficiency and productivity
To do so, he wanted managements to replace old
methods and techniques by Modern methods which
will raise productivity and offer benefits to all
concerned parties.
 CONTRIBUTION OF SCIENTIFIC
MANAGEMENT THEORY TO
INDUSTRIES…
2. Introduction of better methods and techniques of
production
He suggested new methods after systematic study and research
Work-study techniques

3. Emphasis on planning and control of production:

He suggested the importance of:-
 production planning and control for high production,
superior quality production and also for low cost production.

4. Importance of personnel and personnel department:

personnel policies for the creation of efficient and satisfied labor
force.
the need of personnel department and its importance.
He favored incentive wage payment to workers
 CONTRIBUTION OF
SCIENTIFIC MANAGEMENT
THEORY TO INDUSTRIES…
5. Industrial fatigue and rest pauses:
the introduction of suitable rest pauses for
removing such fatigue of workers.
reduce the burden of work on workers through
the use of scientific methods
CONTRIBUTION OF
SCIENTIFIC MANAGEMENT
THEORY TO INDUSTRIES…
6.Time and motion study
Timing indicates how long it takes good workers
to complete each part of their jobs.
Motion Study is breaking each task or job into
its separate motions and then eliminating those
that are unnecessary or repetitive
7.The positive view of scientific management was
described by Taylor as “
Science, not rule of thumb
Harmony, not discord ( conflict or disagreement)
Co-operation, not individualism
maximum output in place of restricted output.
 PRINCIPLES OF
SCIENTIFIC
MANAGEMENT
According to Taylor there are four
important underlying principles of
management.
1. The development of 'One best way" of doing a job.
The standards are decided scientifically for Jobs and incentive wages for all
production above standard.
job analysis and standardization of tools, equipment, machinery, etc. are
required.

2. Scientific selection of workers and their development

through proper training.
3. Scientific approach by management.
The management has to develop a true science in all fields of work activity
through scientific investigation and experiments
4. Close co-operation of managers and workers
 IMPORTANCE OF SCIENTIFIC
MANAGEMENT

1. Application and use of scientific methods.

2. Wide scope for specialization and accurate planning.
3. Minimum wastages of materials, time and money.
4. Cordial relations between workers and management.
5. Benefits to workers (higher wages and less
burden of work),
6. Benefits to management (cost reduction, better
quality productions) and
7. Benefits to consumers (superior goods at lower
prices)
 LIMITATIONS AND CRITICISM OF
SCIENTIFIC MANAGEMENT

Scientific management has wider economic and

social significance
In spite of several benefits, Taylor's scientific
management concept has widely been
criticized by employers, workers, trade unions
and also by theorists.
Criticism from Employers
Huge investment required:-for reorganization
of preliminary standardization of tools,
machines and equipment and conduct of time
and motion.
CRITICISM FROM
EMPLOYERS
Unsuitable to small units: due to
financial and other difficulties
Benefits after a long period: The
benefit of scientific management will
be available only after a long period
and financial and other difficulties
during the process of introduction of
new changes
Huge overhead expenses
required: this may erode profitability
 CRITICISM FROM WORKERS
AND TRADE UNIONS
Heavy burden on workers: Workers feel that
they will have to share more burden of work as a
result of introduction of scientific management
Workers and their unions feel that it will lead to
their exploitation
Reduces initiative among workers: Workers
and trade unions argue that scientific
management will destroy their initiatives.
Worker will be converted into machines in
the production process with no freedom,
initiative and choice.
 CRITICISM FROM WORKERS
AND TRADE UNIONS
Possibility of unemployment: They believed workers
will be removed due to the use of labour-saving devices
Exploitation of workers: worker and trade unions
believed worker will have to share more burden of work
without corresponding increase in the wage rate.
Possible adverse effects on workers unity: Workers
will be divided into efficient and inefficient categories.
different piece rate plans will be introduced in place of
uniform wage rate and as a result, workers will be
divided
Trade unions strongly criticize scientific management
as it breaks solidarity of workers.
 CLASSICAL ORGANIZATIONAL
THEORIES AND HENRY FAYOL
This theory was
aiming at
administration of
entire organization.
Focuses on the
management process
and principles of
management
Administrative theory
provides a more
general theory of
management.
HENRY FAYOL (1841-1925)

He rightly treated as the father of modern theory of

general and industrial management.
He developed his management principles and general
management theory
He recognized as the founder of modern management
theory
suggested important qualities of managers and stressed
the need for raising such qualities.
He developed fourteen principles of management
out of his practical experience.
first management thinker who provided the conceptual
framework of the functions of management
These basic functions of management process and
practice are universally accepted.
 CONT…
The functions of management according to
Fayol are,
1. Planning
2. Organizing
3. Staffing
4. Commanding
5. Controlling
 CONT…
Fayol divided general and industrial
management into following six groups:-
1.Technical activities (production, manufacture,
adaptation).
2.Commercial activities (buying, selling and exchange).
3.Financial activities (search for and optimum use of
capital).
4.Security activities (protection of property and persons).
5.Accounting activities (stock taking, balance sheet, cost,
and statistics).
6.Managerial activities (planning, organizing, command,
coordination and control).
 FAYOL'S 14 PRINCIPLES OF
MANAGEMENT
Division of work: produces increased and improved performance with
the same effect
Various functions of management cannot be performed efficiently by a
single proprietor or by a group of directors.
Authority and responsibility: A manager may exercise formal authority
and personal power.
Responsibility is closely related to authority and it arises wherever
authority is implemented.
Discipline: obedience to authority, adherence to the rules of service and
norms
It is necessary for the smooth functioning of a business
discipline can best be maintained by :
 (i) having good superiors at all levels;
 (ii) agreements (made with employees that are as clear and fair as
possible; and
 Penalties judiciously imposed.
 CONT…
Unity of command: Every employee should receive orders from only
one superior. There should be a clear-cut chain of command
Dual command is a permanent source of conflict.
Unity of direction: congruency between individual and organizational
goals on the one hand and between departmental and organizational
goals on the other.
There should be, "one head and one plan for a group of activities
having the same objective".
Subordination of individual interest to general interest: calls for
reconciliation of objective of individuals with those of the organization
Organizational interests are more important than those of the
individuals.
be emphasize that social and national interests should have
precedence over organizational interests whenever the two run counter
to each other.
 CONT…
Remuneration: Employees should be paid fairly and
equitably
It should be based on general business conditions, cost of
living, productivity and efficiency of the concerned
employees and the capacity of the firm to pay
Centralization: the management must decide the degree
of centralization or decentralization of authority based on
the nature of the circumstances, size of the undertaking,
the category of activities and the characteristic of the
organizational structure.
centralization and decentralization is a question of
proportion
The objective should be the optimum utilization of all
 CONT…
Scalar chain of Command: is the chain of superiors ranging
from the ultimate authority to the lowest ranks
As per this principle, the orders or communications should pass
through proper channels of authority along the scalar chain.
Order: to put things in an order takes effort
The management should observe the principle of 'right place
for everything and for every person’
Equity: It means that subordinates should be treated with
justice and kindliness.
essential for eliciting employees devotion and loyalty to the
enterprise
It requires managers to be free from all prejudices, personal
likes or dislikes.
 CONT…
Stability of tenure of personnel: The managerial policies
should provide a sense of reasonable job security.
In order to motivate workers to perform additional and improved
quality and quantity of work, it is necessary that they be assured
of the security of their job by the management.
Initiative: Managers must create an environment which
encourages their subordinates to take initiative and responsibility
Employees should have a positive attitude and make suggestions
freely.
Esprit de Corps: Cohesiveness and team spirit should be
encouraged among employees.
This means team strength
Harmony and solidarity among the staff is a great source of
strength for the undertaking.
 3.3 BUREAUCRACY
MANAGEMENT THEORY
Max Weber analyzed bureaucracy as the most logical
and rational structure for large organizations.
Theory of authority structures and described
organizational activities on the basis of authority
relations
Model structural design for many of today’s large
organizations
 CONT…
Efficiency in bureaucracies comes from:
1. clearly defined and specialized functions
2. Use of legal authority
3. Hierarchical form
4. written rules and procedures
5. Technically trained bureaucrats
6. Appointment to positions based on technical
expertise
7. Promotions based on competence
8. Clearly defined career paths.
 BUREAUCRATIC PRINCIPLES

Written rules
.

System of task A Bureaucracy Hierarchy of

relationships should have authority

Fair evaluation
and reward
 ELTON MAYO: THE HUMAN
RELATIONS THEORY
Introduction
The classical writers focus on the structure and
formal organization and concerned with
efficiency and productivity than the
relationship between the organization and its
members.
But during the 1920’s , greater attention began to be paid to the
social factors at work and the human relations movement came
with the famous Hawthorne experiments (1927-32) at the Western
Electric Company
The study concentrated on how groups and individuals reacted at
work.
 ELTON MAYO: THE
HUMAN RELATIONS
THEORY
Mayo also recognised that managers did not
always follow the rules and allow employees
some freedom to organise their working
arrangements.
“Hawthorne Studies” conducted at the Western Electric
Company’s Hawthorne plant near Chicago.
The studies lasted more than five years (1927-1932).
These ‘Hawthorne studies’ become an historic landmark in
administrative thought as they helped in developing the
Human Relations School
Hawthorne experiments brought to light ideas concerning
motivational influences, job satisfaction, resistance to change,
group
 SOCIAL DISORGANIZATION
AND SOCIAL MALAISE
For Mayo man is a social animal who finds a sense of
identification and personal security in cooperative
relationships
Society constitutes a cooperative system, and a civilized
society is one that is based on the spontaneous and voluntary
cooperation of its members, rather than on force.
Mayo asserts that modern society suffers from a breakdown
of the social routines of traditional society.
According to Mayo, the modern society is facing a condition of
social disorganization.
Mayo maintains that the problem of social disorganization has
been complicated by an economic theory that emphasizes
competition in the pursuit of individual self-interest
 SOCIAL DISORGANIZATION
AND SOCIAL MALAISE…
According to him, economic theory, based on
the 19th century concept of individualism,
considers society to be a collection of
unrelated individuals motivated by hedonistic
interests.
According to Mayo, the social disorganization
lead to personal disorganization.
Mayo contends that in modern society
socialization has been subordinated to logic,
but the logic developed has been inadequate
to the task of promoting effective social
 INDUSTRY AND
DISORGANIZATION
According to Mayo , disorganization has also
contributed to conflict and class
consciousness in industrial setting.
Mayo considers the industrial organization to
be a fundamental social unit.
Mayo contends, occupation has been
divorced from social function, and social
conflict has embittered relationships with
industry.
Mayo considers unions to be a reactionary
A SUMMARY OF MAYO’S SOCIAL
AND POLITICAL PERSPECTIVES
1. Civilization has moved from a society of established customs
and routines to a society marked by disruptive social, scientific,
and technological changes.
2. Logical responses have not been developed to cope with these
social changes.
3. The problem of social disorganization has been complicated by
an economic theory that emphasizes competition in the pursuit
of individual self-interest and a political system
4. The social malaise is reflected in individual behavior which
prevent adequate adaptation to changing social conditions
5. The problem of personal disorganization is exacerbated in the
industry where work has been reduced to a monotonous routine
and where technological changes and specialized procedures
have deprived work of a sense of social function.
 MAYO’S EMPIRICAL
STUDIES
The turning point in the development of the Human Relations
Movement was the Hawthorne experiments at the Western
Electric Company in USA (1924-32)
Focused attention on the behavior of workers and their
production capacities, keeping in view of all physiological,
physical, economic and psychological aspects
The Western Electric Experiments
There were four main phases to the Hawthorne experiments
1. The illumination experiments
2. The relay assembly test room
3. The interviewing programme
4. The bank –wiring observation room
 THE ILLUMINATION
EXPERIMENTS(1924-27)
to determine the effect of illumination on the worker
and his work
Two groups ( an experiment group and a control
group) of workers had been separately formed
The level of production was influenced, clearly, by
factors other than changes in physical conditions of
work/degree of electricity light
 THE RELAY ASSEMBLY
TEST ROOM.
Six female operatives engaged in assembling telephone
relays, were placed in order to observe the effect on their
output and morale of various changes in the conditions of
work.
The investigation was divided in 13 periods.
During which the workers were subjected to a serious of
planned and controlled changes in their conditions of work ,
such as hours of work, rest pauses and provisions of
refreshments.
During the investigation, the observer adopted a friendly
manner, consulting with the workers, listening to their
complaints, and keeping them informed of the investigation.
Almost without exception output rose with each change
 THE RELAY ASSEMBLY
TEST ROOM
Mayo’s conclusion was that work satisfaction
depends largely on the informal social pattern of
the work group.
Where norms of cooperativeness and productivity
are established because of a feeling of importance,
physical conditions have little effect.
THE INTERVIEWING
PROGRAMME (1928-31): HUMAN
RELATIONS AND SENTIMENTS
In 1928, Mayo and his team started to study human
attitudes and sentiments.
For this purpose employees were asked “to express
frankly their likes and dislikes about their working
environment”
it was found that “there was no simple and direct
relations between the complaint and object toward
which the complaint was directed”.
The team concluded that the pre-occupation of the
employee with personal problems like family tragedies,
sickness, etc. which Mayo has called Pessimistic
reveries affected his performance in the industry.
THE INTERVIEWING PROGRAMME
(1928-31): HUMAN RELATIONS AND
SENTIMENTS

The results of the investigation

the employees “appreciated being
recognized as individual who had
valuable comments to make”.
the interviewing programme created a
change in supervision
the interviewers felt that “they had acquired
a new and improved way of understanding
and dealing with their fellowmen/women”.
 THE BANK-WIRING
OBSERVATION ROOM (1931-
32): SOCIAL ORGANIZATION.
was to analyze the group behavior in a non-experimental situation.
the team was set up of 14 men. 9wiremen, 3 soldiers and 2
inspector
The objects of the study included the behavior of four supervisory
officials( group leader, section officer, assistant foreman, and
foreman) who came into contact with the workers
Outcome of the experiment
It was found that employees restricted their output and deliberately
held down their own wages
The group had a norm of output and this was not exceeded by any
individual(similar to Taylors soldiering practice concept )
The whole group developed norms surrounding the production
rate(norm of output):
 THE BANK-WIRING
OBSERVATION ROOM (1931-
32): SOCIAL ORGANIZATION.
The group had developed its own code of
behavior which clashed with that of
management.
This code was composed of solidarity on the
part of the group against management.
An individual worker was required to refrain
from telling anything to the supervisor that
would be detrimental to an associate.
 DISCUSSION
QUESTIONS
How you can overcome soldiering practice if it
exist in the modern Organization?
Discuss in group of five students and report to the
class
(10 minutes)
MAJOR FINDINGS OF THE HAWTHORNE STUDIES

The output or the amount of work of a worker is

not determined by his physical capacity but by his
social capacity.
Non-economic rewards and sanctions significantly
affect the worker’s behavior
A worker often does not act or react to
management as an individual but as a member of
groups.
Communication, participation, and leadership play
a central role in worker’s behavior.
 CLASSICAL VS NEO CLASSICAL
THEORIES CONCLUSION
Classical and neoclassical theories of management are two of
the most important schools of thought in the field of
management.
Classical theory is based on the idea that organizations are
rational systems that can be managed through a set
of principles and rules.
The classical approach to management emphasizes the
importance of efficiency, standardization, and hierarchy in
organizations.
On the other hand, neoclassical theory is based on the
idea that organizations are social systems that are
influenced by human behavior.
The classical approach to management is often associated with
the work of Frederick Taylor, Henri Fayol, and Max Weber.
Taylor’s scientific management theory focused on improving
efficiency by breaking down tasks into smaller, simpler
components and optimizing each component.
Fayol’s administrative management theory focused
on the importance of management functions such
as planning, organizing, commanding, coordinating,
and controlling.
The neoclassical approach to management
emerged in the 1920s and 1930s as a response to
the limitations of classical theory.
The Hawthorne experiments conducted by Elton
Mayo and his colleagues at the Western Electric
Company’s Hawthorne plant in Chicago highlighted
the importance of social factors such as group
norms, communication, and leadership in
organizations.
The human relations movement that emerged from
the Hawthorne experiments emphasized the
importance of employee satisfaction,
THE END

Thank
you!